Jerusalem — A secular Israeli entrepreneur has won the race to serve as mayor of the holy city, wresting control from ultra-Orthodox Jewish parties and emphasizing the growing divide between Israel's secular and religious culture.

Nir Barkat, a high-tech investor, scooped up 52 percent of the vote during municipal elections, the results of which were announced early Wednesday.

Mr. Barkat's supporters heralded his victory as an important move toward returning Jerusalem to a place of diversity and tolerance. But the incoming mayor's hard-line stance against making any concessions to Palestinians about the status of East Jerusalem has many wondering what his ascent will mean for the Middle East peace process, expected to regain momentum early next year.

"Victory belongs to all those who love and cherish this special and amazing city of ours, the Jewish people's eternal capital.... I'm aware of the depth of the challenge and the complexity of the mission," Barkat told his supporters at a speech at his headquarters, sometime after 3:00 a.m. on Wednesday. "Now is the time to work together for the good of the city."

Precisely because this is the storied city that Israel calls its eternal capital and Palestinians call occupied, the person who runs Jerusalem's top office is poised to play an important roll in future peace talks.

Across East Jerusalem, which was annexed by Israel after the 1967 war, Arab residents routinely sit out of the municipal elections as a symbol of their rejection of Israeli rule. Were they to exercise their right to vote, they would make up close to a third of the electorate. Arab East Jerusalemites are also allowed to vote in Palestinian Authority elections.

Ir Amim, an Israeli organization working for "an equitable and stable Jerusalem with an agreed political future," is concerned about Barkat's connections with Israeli nationalists who want to settle Jews in East Jerusalem.

Speaking to journalists on Wednesday evening, Barkat indicated that he would address the problem of skyrocketing real estate prices by building apartments in occupied East Jerusalem. "I see no reason not to build apartments in areas that are under our law for people who want to stay in the city.... That's one reason I want to expand Jewish neighborhoods throughout East and West Jerusalem," he said.

Israeli building over the pre-1967 border, which did not include East Jerusalem, is considered illegal by the United Nations, and longstanding US policy officially discourages Israeli building in East Jerusalem and in the West Bank because it would prejudice the outcome of the future peace talks.

"We should expand current Jewish neighborhoods and build affordable housing, but not at the expense of developing Arab neighborhoods," said Barkat.

He added that during his tenure, he would improve services to 'legal Arab residents.' Many Arabs were living in the city illegally, he said, suggesting that they had migrated from the West Bank without Israel's permission. This is a "big problem" that "has to be sorted out," he said.

His proposals have caused concerns among some Israelis. "He was appealing to the right wing as he was running. But how many of the things he's committed to and what he just promised on the campaign trail are not clear," says Sarah Kreimer, the executive director of Ir Amim. "Barkat's agenda is a right-wing agenda, but it's primarily concerned with economic growth in Jerusalem, so we hope what he will have the most effect on is the livability in the city."

Indeed, for many Israelis the election centered on the divide between ultra-Orthodox Jews and the growing secular population.

Ultra-Orthodox contender Porush's image as a black-suited, long-white-bearded religious figure was deemed to be so off-putting to the city's non-Orthodox voters that all of his campaign ads featured a cartoon likeness of him, rather than an actual photograph.

Porush also tried to portray Barkat as a leftist who would follow the dictates of the leading Kadima Party and divide Jerusalem.

But most voters seemed less than concerned with questions of whether Jerusalem would be divided in a future peace agreement, and more worried about meat-and-potatoes issues, such as affordable housing, quality schools, public transportation, and decent parks.

In Jerusalem, however, the battle for resources has taken an us-vs.-them hue, with many voters feeling that since 2003, when Mr. Lupolianksi became Jerusalem's first ultra-Orthodox mayor, funding was only going to the very religious sector of the city, whose residents are known as the haredim, Hebrew for trembling.

Nadia Levene, an event planner and public relations consultant, has been living in Jerusalem for 20 years. When she first came to the city, relations between secular and religious groups were much better than they were today, she says.

"It's gotten very bad, and unfortunately, I blame the haredim because they tend to be more intolerant," she says.

In the past couple of years, when she was planning cultural events, she found complete disinterest from the mayor's office. Some such events were fundraisers involving dancing between men and women. Last December the mayor did not respond to repeated requests to participate or send others from his office to an interfaith celebration last December for Christmas, Hanukkah, and Eid al-Adha.

"I'm really against the haredim taking over the city," says Shuli Bitton, a real estate agent who says that most secular people her age are leaving Jerusalem for lack of affordable housing.

Her friend, Miri Raz, speaks with relief about the results. "There are whole neighborhoods that you don't feel comfortable walking through anymore.... I voted [for] Barkat because I think he'll put more resources towards education, and not just for religious schools," she says.

Around the corner, three college-age seminary students were dismayed that their candidate Porush didn't win. "But we don't get involved in politics," says one of trio, Eli Herzich. "It's all in God's hands anyway."